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As I continue to look at SD legislative races without a general election it is time to look at District 15 State Senate. District 15 seems to mostly fall within Northern Sioux Falls. Currently Sen Angie Buhl O’Donnell (D, Dist 15) represents District 15. She did not seek reelection and the term-limited Democrat Rep Patrick Kirschman thought he would switch from the House to the Senate. In the meantime another Sioux Falls Democrat, Reynold Nesiba, moved into District 15 and also sought the Senate seat. Nesiba defeated Kirschman 56.67% to 43.33%.

I currently serve as Professor of Economics at Augustana University, where I have been employed since 1995. I plan to maintain that position. However, if elected, I will reduce my teaching load so that I can meet my responsibilities as a State Senator in Pierre beginning in January of 2017.

Nesbia does have somewhat of an issues page on his campaign site. But I think more can be learned back on his bio page listing his legislative priorities:

My legislative priorities are to protect the use of ballot measures, to continue to rein in predatory lenders, to properly fund education, and to advocate for economic development policies that prioritize workers and local entrepreneurs over out of state corporations. I am also enthusiastic about working with other citizens and legislators to restore the health of our Big Sioux River.

Speaking of ballot measures and payday lenders, Nesiba is the treasurer for South Dakotans for Responsible Lending. This is the group that circulated petitions for Initiated Measure 21 (IM21), which would cap interest rates for payday lenders at 36%. Due to the many dirty tricks already taken by the payday lending industry to fight IM21 I wouldn’t be surprised if the industry didn’t throw some money at Nesiba’s opponent just to retaliate.

In the classroom, I make strong arguments both for and against the minimum wage. I do, after all, want my students to be able to think critically and to reach and be able to defend their own opinions about matter of public policy. In my own thinking, I have publicly supported a higher minimum wage in the state of South Dakota through collecting ballot petition signatures, speaking out in a variety of different venues, and in this case co-authoring a column in the Argus Leader with a colleague from the Economic Policy Institute (EPI).

I think it is pretty clear Nesiba is an advocate of direct democracy. I also see he is one of the more active candidates on Facebook, trying to communicate out to potential constituents.

SD District 2 State Senate is another race with no general election. The current Republican incumbent, Sen Brock Greenfield, did not face a primary and will not have a general election opponent. Just as I am doing with all non-contested races, I will look at a few pieces of legislation from Greenfield so District 2 constituents can get an idea of the legislative priority of their chosen State Senator.

Brock Greenfield has served in Pierre for 16 years. After winning a fairly competitive State Senate race against Democrat Chuck Welke in 2014, Greenfield now has a pass for the 2016 election. In this post I will look at three pieces of legislation prime sponsored from Greenfield during the 2016 session.

First up is SB 117 (SoDakLiberty Posts). SB 117 is an Act to “Permit the practice of midwifery by certain persons.” Basically this bill would have allowed people who are licensed to practice midwivery in other states to perform most midwivery duties in South Dakota. This was basically seen as a way to get the midwife field moving forward in South Dakota until a true licensure scheme is created in South Dakota; which was attempted in HB 1162 (SoDakLiberty Posts). This is an issue that conservative groups have been following and pushing for. It was not surprising to see Greenfield sponsoring this bill because he does seem to bring forth a lot of legislation that is geared towards socially conservative issues. SB 117 failed to pass through Senate Health, but it is likely this will be attempted again in 2017. Personally I think the midwivery industry should be enabled in South Dakota; but at the same time I think anyone looking into midwives should do a LOT of research on who they are considering hiring as a midwife. I was able to hear a lot of good and bad stories about certain midwives this previous legislative session.

Another bill to look at from Greenfield is SB 119 (SoDakLiberty Posts). SB 119 was an Act to “require legislative authority for refugee actions under South Dakota law.” This bill of course came about due to the Obama administration announcing last fall that there would be an increase in the amount of refugees from Syria. Many governors around the country tried to take steps to bar these refugees from entering their states. South Dakota Governor Daugaard was not one of those governors. In response legislation such as SB 119 was brought forth in 2016. Basically the bill would have required the Department of Social Services (DSS) to get legislative approval before entering into agreements pursuant to the Refugee Act of 1980. In South Dakota that would be Lutheran Social Services (LSS). One of the problems with this bill is that DSS does not have an agreement with LSS. LSS deals directly with the federal government. Technically and legally the state of SD has no say in whether refugees come to the US and whether they enter SD. This bill died. But it was supported by hardcore conservatives and was another example of Greenfield taking on socially conservative issues.

Finally it is worth looking at a tax bill, SB 147 (SoDakLiberty Posts). SB 147 was an act to “exempt certain amateur sports coaches from sales and use tax.” Basically this bill would have exempted American Legion and VWF coaches from sales and use tax. Traditionally these coaches were not subject to sales and use tax. However a couple of years ago the Department of Revenue (DOR) reinterpreted state law and decided to go after these coaches. In response Greenfield brought forth SB 159 (SoDakLiberty Posts) in the 2015 session that would exempt American Legion and VFW coaches from sales and use tax. That bill passed both chambers but was subsequently vetoed by the governor. The legislature was unable to overturn that veto. The 2016 version, SB 147, was not able to make it off the Senate floor. This was an interesting bill because it was not presented as a new exemption, but rather as a way to overturn the reinterpretation of law by bureaucrats. Greenfield is one of the few legislators that doesn’t seem afraid to call out bureaucrats on the chamber floor.

This particular summer study was requested by Rep Jean Hunhoff (R, Dist 18) and Rep Dick Werner (R, Dist 22). This is a topic I am currently researching in able to follow what happens with this summer study. In this post I will look briefly at the documents provided by the committee for this meeting.

Assess existing payment methodologies for Medicaid providers to determine adequacy of payments that will provide for long term continuation of services and conclude with recommendations for any changes.

Actual costs versus cost report data – What is included in cost reports – cost report years used for
calculation.

Projection of provider needs 5/10/20 years.

Costs unaccounted for in reports.

Other payment methodologies used in other states – Pros/Cons.

Recommendations for any change.

Funding sources for any changes for recommended increases.

Sustainability and future growth.

Impact of federal mandates.

Looking at the impact of federal mandates was added to the committees scope by the Executive Board. Personally I think impact of federal and state mandates for all areas of public spending should be looked at.

Medicaid 101

The first real item on the agenda is labeled Medicaid 101. The Department of Social Services (DSS) has provided a Medicaid Overview document that is being presented to the committee.

There often seems to be a lot of confusion about the difference between Medicaid and Medicare as I talk to people about topics such as Medicaid Expansion (another topic I need to blog about). Here is the quick bullet point difference DSS has put into its presentation:

Medicaid is for low income and disabled individuals

Medicare is for individuals age 65 and older and some
younger people with specific long-term disabilities

Another topic that comes up often is the Children’s State Health Insurance Program (CHIP). CHIP is authorized by Title XXI of the Social Security Act. It is very similar to Medicaid. Here is a key part from the DSS presentation:

CHIP covers children up to age 19 who have incomes too high to qualify for Medicaid – those up to 209% FPL ($50,787 annually for a family of four)

The next slide I will show in its entirety. In this slide DSS addresses who is eligible for Medicaid in South Dakota:

It is quite apparent above that Medicaid covers South Dakota residents truly in need. DSS notes that almost one in seven South Dakotan’s have health coverage through Medicaid or CHIP; with one in three children being on Medicaid or CHIP.

The full DSS presentation is worth reading. Actually the presentation will also be worth listening in on. I’ll stop blogging about this section and wait to hear what DSS has to say. More to come!

Provider Reimbursement

The other big agenda item is provider reimbursement; which of course is what this actual summer study is about. DSS and the Department of Human Services (DHS) are on the agenda to speak about this topic. DSS has also made a presentation document available explaining the provider rate setting process. This document I will not go through at this time. Instead it is worth hearing what DSS and DHS have to say and then focus on key areas of the document.

On the agenda has an item labeled ” Digitization of the SD Codified Law”. There is a document available on the LRC website explaining this agenda item. The SD State Library is going through the process of digitizing historical volume of the SD Codified Law. So far the Library has been going with volumes prior to 1923. But apparently the volumes from 1923 on are considered under copyright and they are seeking the permission of the LRC and Code Commission to “digitize possibly copyrighted editions of those works, to archive the digital version of the works, and to make the digital works publicly accessible.” I don’t see any reason the LRC and Code Commission wouldn’t do so. It would make certain types of research much easier!!!

There are quite a few documents on the site worth viewing. For instance I have been reading about the apportioning of legislative districts in the 1903 Blue Book. At that time most of the counties were apportioned one State Senator, although there were some cases of counties sharing a State Senator. There were also other counties, such as Brown, that had two state Senators. The State House seats were apportioned from one to five seats for each county; although there again some counties were banded together. Brown County had four State Representatives at that time. I’ve heard it said that there are too many people in the SD State Legislature; whether that is true or not I can’t say. But I can say we have a lot fewer elected officials than we used to in South Dakota.

SDDC tour and discussion of operations

On the agenda is a tour of the South Dakota Developmental Center (SDDC) and then a discussion with the Department of Human Services (DHS) about SDDC operations.

The SDDC was the subject of a couple of bills in the 2016 legislative session. HB 1208 (SoDakLiberty Posts) was signed into law and would allow the state to sell land currently in the control of the SDDC. This includes possibly selling land that buildings slated to be demolished are located on. The sale of that land will be used for the SDDC.

There was a second bill, HB 1015 (SoDakLiberty Posts), to demolish certain buildings on the SDDC campus. But that bill was killed and paying for the building demolition was included in an amendment to HB 1208.

The SDDC campus is of particular interest to me as I am working on a separate project about some “patients” that resided on this campus during a darker era of South Dakota healthcare.

DHS discussion of LifeScape

LifeScape formed in mid-2014 when Children’s Care Hospital & School and South Dakota Achieve joined together. We are an independent, non-profit organization, serving adults and children in Sioux Falls, South Dakota. Our center in Rapid City provides therapy and psychological services for children on an outpatient and outreach basis.

This might be worth checking out for anyone that has had any dealings with LifeScape.

In this post I will briefly look at some important sections of this draft policy.

Timelines for collecting debt before going to the ORC

Before sending debt to the ORC each state agency must follow these timelines:

Day 1-30: First statement is sent to the debtor. The timeline begins on the day the debt was incurred.

Day 31-60: Second statement is sent to debtor. Additional information about the debt is included with this statement.

Day 61-90: Third statement is sent to debtor. This is basically the same as the second statement, except additional “principal, penalties, fees and interest due as part of the debt” are included.

Day 91-105: Final notice is mailed to debtor. All information from the 2nd and 3rd statements are included. The debtor is notified that after 14 days the debt will be turned over to the ORC and that the ORC will add its additional 20% fee if the ORC receives the debt (more on that later).

Basically the state agency owed a debt has to try collecting that debt for at least 90 days before turning the debt over to the ORC. The agencies also have to try at least three attempts to collect that debt during those 90 days. The agency will then electronically refer the debt to the ORC within twenty-two days of sending the final notice. Each agency will send this debtor information once a month and after referring debt to the ORC the state agency is no longer allowed to attempt collecting debts.

ORC cost recovery fee

The ORC is allowed to add a 20% cost recovery to each debt referred. This 20% is in addition to the debt owed and is calculated using the principal of the debt. For instance, if a person owes the state $1,000, the ORC can add 20% to that and collect $1,200 from the debtor. The extra $200 goes to CGI (the organization in charge of the ORC) as payment for services.

Changes in status of debt

The state agency that has referred debt to the ORC must update the ORC within 10 days of a change in the status of that debt. These changes can include “payment of the debt or liability, invalidation of the liability, bankruptcy or other factors.”

This might be a worthwhile policy for those owing the state to remember. It would appear that if someone pays the debt to the agency, even if debt is currently held by the ORC, the person owing the debt still has the option to pay the state agency directly. That might be a good way to avoid paying the 20% cost recovery fee.

Vehicle Registration, License and Permit Enforcement Actions

This is the most contentious portion of the ORC. It allows the ORC to have state agencies withhold certain licenses if money is owed to the state. Here is a summary of this action from the policy:

SDCL 1-55-12 prohibits state agencies from issuing, renewing, or allowing an individual to maintain any motor vehicle, motorcycle, or boat registration, driver license, hunting license, fishing license, state park permit, or camping permit, after receiving notice from the Center that the applicant, registrant, or licensee has a debt that is being collected by the center, unless the applicant, registrant, or licensee has paid the debt and cost recovery fee in full or the debtor has entered into a payment plan with the center and payment pursuant to the plan is current.

The good news in this is that there is an option to set up a payment plan to keep a license. But there isn’t any policy as to how much that payment plan has to be. It is possible even a payment plan would be too much money for a person in debt to be able to handle. There appears to be a good chance many people will lose the ability to renew licenses; and thereby lose the ability to earn the money needed to get out of debt.

There was an attempt to remove this ability of the ORC during the 2016 session via SB 123 (SoDakLiberty Posts). Sen Troy Heinert (D, Dist 26) brought forth SB 123, which would have removed the ability of the ORC to keep people from registering vehicles, renewing drivers licences, hunting licenses, fishing licenses, or camping spots. Unfortunately Senate Judiciary killed the bill 4-3.

The state agencies that will be asked to withhold licenses and the types of licenses are as follows:

In order to withhold these licenses the following criteria must be met:

The debt must have been held by the ORC for at least 60 days (so it is not instantaneous).

The ORC must have made at least 3 attempts to contact the debtor.

The ORC does not have a payment plan with the debtor, or the debtor has not followed a payment plan. (so a payment plan can stop this action).

For the GPS licenses to be withheld the debt owed must be $50 or greater. For DMV and DPS licenses to withheld the debt owed must be $1,000 or more.

I don’t think may will care about the GPS licenses being withheld. But the DMV and DPS licenses being withheld is likely to impact people very negatively. It is not hard to have $1,000 in debt owed; and that $1,000 can seem insurmountable to many people. The legislature may regret not passing Sen Heinert’s bill to remove this ability from the ORC.

Due Process Hearing

Any debtor who will have their licence withheld due to ORC actions have right to a due process hearing. The ORC may (notice the word may, it is a choice) recommend the state agency temporarily allow a licence until there is a final resolution of the due process hearing. Personally I think this policy should be changed to the ORC must recommend a temporary license until the due process hearing is completed.

The Office of Hearing Examiners (OHE), a part of the BOA, will conduct the hearing. Debtors will be notified of the hearing via USPS or e-mail. This hearing will not be about whether the debt is owed or not. Rather the hearing is to ensure the proper procedures were used to try collecting the debt. After the hearing the OHE make their recommendation to the state agency within 10 days. Then the agency must decide whether to adopt or reverse the OHE recommendation within 10 days. So technically it will be the agency owed the debt that will decide whether the debt collection procedure was followed correctly. That doesn’t seem like true due process.

Debt the ORC cannot collect

If the ORC simply cannot collect the debt, the ORC will have to return that debt to the state agency for final disposition. This policy acknowledges that there is debt the ORC simply will not be able to collect on. This is important because the ORC was pushed by proponents in part due to the large amount of debt that has gone uncollected. If the amount of debt going uncollected going to final uncollected disposition is the same or more than before the ORC was implemented, it would show this program is a failure. In order for the ORC to be a success the amount of uncollected debt has to be decreased dramatically.

On May 17, 2016, the Government Operations and Audit Committee (GOAC) met in Pierre for its first meeting of the 2016 interim session. My post prior to that meeting can be viewed here and the minutes from that meeting can be viewed here. The main item of interest for me in that meeting was an update on the Obligation Recovery Center (ORC). The ORC is the new state collection agency created by the legislature in 2015 via HB 1228 (SoDakLiberty Posts) because some legislators feel the private company that had been hired to collect debts for the state wasn’t doing a good enough job.

Jeff Holden, Commissioner of the Bureau of Administration (BOA), was on hand to update GOAC as to how the implementation of the ORC has gone so far. The first part of his presentation focused on awarding CGI Technologies and Solutions Inc (CGI) the contract to implement the ORC. This happened in November of 2015 and I have the following three posts looking at this aspect of the ORC:

In my post looking at the scope of work I included this proposed timeline CGI would use for implementation:

Technically if CGI was keeping their timeline that means the implementation for collecting UJS fines and restitution would have been online by the time of the May GOAC meeting. But that does not appear to be valid anymore. The minutes from the May GOAC meeting includes this:

He stated that CGI has begun working with agencies to gather information specific to each agencies debt collection processes. The ORC manager will soon be finalizing a process that State agencies will follow prior to reverting debt to the ORC and the BOA will develop this process into proposed administrative rules. Commissioner Holden stated that CGI has contracted with Wells Fargo for collections and transferring funds and this process is expected to begin on July 15, 2016.

So that shows the ORC is at least three months behind schedule for implementation. Further, the three agencies that have agreed to move forward with the ORC and will be a part of “phase one” are the South Dakota Unified Judicial System (UJS), Department of Corrections (DOC) and Game, Fish and Parks (GFP).

Commissioner Holden also noted that in December of 2015 there were RFP’s issued to attain three third-party debt collection services. The BOA is currently negotiating contracts with the companies receiving the contracts. These contracts will be for one year initially; with options to extend the contract a year based upon performance.

There was a question to Commissioner Holden about CGI’s contract. Holden specified CGI had not yet been paid anything. CGI will get paid only as debt is collected. At that time CGI will receive 20% of all revenues collected as per the law that implemented the ORC.

Finally Sen David Novstrup (R, Dist 3) asked about the decision for denying license renewals for individuals that owe the state money. Holden noted the details are still being worked out. But this is listed in the minutes:

Commissioner Holden stated that an individual will lose their hunting and fishing licenses if they owe the State a minimum of $50 and have been notified three times of the amount due. He explained that this is similar to motor vehicle registrations and licenses; however the minimum amount of outstanding debt to the State is $1,000.

As the implementation of the ORC gets closer I still see no reason the people of South Dakota should not be wary of this new debt collection center. This ORC will have the power to take away people’s ability to renew licenses. A person unable to renew a vehicle license will likely lose the ability to actually pay off the debt owed. $1,000 sounds like a high threshold, unless you are the person that owes that $1,000 and have no means to currently pay off that debt. Giving the ORC the power to withhold licensing just seems like an overreach.